why goods are transfer to branch or department by head office at cost plus certain margin? what head office want to do by this?
It makes accounting so complected.. What is the reason !
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wh why goods are transfer to branch or department by head office at cost plus certain margin?
Replies (2)
I think it is done when branch and Head office maintain there separate books of accounts ...so to evaluate there own profits head office t/f goods at cost+certain margin
Charging margin on the cost is the process of pricing of goods. By this way branch will sale on and above the cost.. It will help to earn good margin as organisation as a whole.
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